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Bridging Loans

Buying a house can be a difficult and often stressful time, and there are a multitude of things that need to be arranged and planned for – the financing of the purchase is the biggest of these.

The vast majority of people will be financing the purchase of their home through a mortgage, and will be combining the funds from this with the proceeds from the sale of their house in order to make up the cost of purchase of the new property. When in such a situation, where you are in a chain and reliant on the sale of your home in order to have the necessary money to complete on your purchase, any delay from the buyer of your home can jeopardise the whole deal.

Many sellers are keen to complete on the sale quickly, and if you delay there is the possibility that you will loose out on the home that you want to buy. Bridging loans are designed to help out in situations where there is a delay from your buyer by providing you with a short-term loan to allow you to complete your purchase while you wait for your buyer to get things in order.

A bridging loan is secured against the value of your current home, and can be for a significant amount of money – often only limited to the capital that you have in your home. The short-term nature and high value of such loans does mean that the interest rates will be high, but in the scheme of things it is a small price to ensure that you secure the purchase of your new home.

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